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Do you use a salesman?

02-15-2013, 11:05 PM

Do you have a salesman on staff or do you handle all the sales work yourself? Those that do have a salesman, what do you have him/her do? What do you pay him/her? A percentage or a set amount per quote, then more if the person signs up? I'm tossing around hiring a salesperson to do quotes etc and want to know what your thoughts are on it.

Comment

most sales reps get 10% commission but in essence they get a weekly salary which is a draw off their commission of 10%.

depending on the size of your business and sales potential you would establish a territory and a realistic sales target number.

lets just say for example you hire a sales rep and give him a territory and you start him out on a salary of 30k.
he would have to bring in 300k in sales to break even on his salary and if he exceeds 300k in sales then he would recieve a additional 10% of what that amount would be.

so lets say he sold 375k for the year, he would already be getting a salary which is considered a draw for the first 300k and then he would get a additional 7,500.00 in salary.
the 7,500.00 would come as he sold each job and it was completed, billed and paid for as well as if the numbers worked out.

if he sold a job and it bombed he would not get any additional money.

when you hire a sales rep it is a very complex system that you have to follow in order to ensure he is getting paid properly and you are making money.
if he sold a 2,000 dollar job and the numbers did not jive he would not get a dime in commission.

there are a lot of things you have to establish first because you don't just give someone a commission just because he brought in a job.
the job has to make money.

depending on what you are doing and what he is selling you have to establish what the numbers are expected to be for him to see that commission.

if he sold a job and put 3 men on it and you for example need to bring in 50.00 per hour per man and the crew was on the job for 8 hrs that would work out to be 3 men x 8 hrs= 24 man hrs @ 50.00 per man hour the billable amount would be 1,200.00 plus materials and tax.

if he sold the job at say 1,000.00 and 3 men were there for 8hrs he would have a 200.00 loss for the day and he would get no additional commissions as well as would have a 200.00 negative balance on his yearly target of 300k.

you would not deduct it from his base salary because by law you can not do that but he would not receive any extra commission and at the end of the year he would not reach his target in sales.

a lot of people think you pay a sales rep a 10% commission regardless and it does not work that way and if that is how you did that you would go broke and he would just be throwing out crazy numbers just so he could get a sale and the whole process would back fire on you.

the key with having a sales rep is there has to be established ground rules and targets that he has to make. on top of that he will be responsible in not only finding the work and generating the sales by any means possible he will also be responsible for the billing, collections, supervising and directing the crews and bringing them to the job and showing the crew exactly what has to be done as well as ultimately be responsible in making sure the work is not only done to company standards but also to the customers standards.
he would also have to send out thank you's to the customers and anything else required to execute the job from start to finish.

having a sales rep can be a good thing and it is like having another owner on the job but the difference is unlike the owner, he see's nothing other then his salary if he does not execute flawlessly.
there are standard sales hiring practices available online but in order to have a sales rep you need to have every little detail spelled out and figured out.
if you are just gonna hire a sales rep because you don't want to do it and you don't have all the procedures in place it will end up being a big mistake for you and cost you a lot of money not only by way of paying a worthless salesman but also having a poorly run jobs and a very inefficiently ran operation that will also further cost you.

Comment

sorry for the jumble of information.
when i saw the topic and replied i hurried it along and bounced around quite a bit and really did not even ( as hard as may be to believe ) get to the point fully because there are so many things you need to do when you hire a sales rep in order for it to be successful.

you really have to have solid systems in place because with a sales rep it is really is like handing over the keys to your business for them to run all or part of it and your role as a business owner changes dramatically.

sales is part of production but it is a different type of production and it is the starting point of making it all happen and there are plenty of other duties that will be forced upon a sales rep outside of just selling and you need to hire someone qualified that has the goods to make it happen and run a business or part of one to help take you to the next level.

it is not really something you want to just throw your buddy into because he has the gift of gab and is good with people who could sell a ice box to a eskimo.

and you don't want to be paying someone to do this for you and you are doing the same as thing as him and not focusing on other area's of the business.

Comment

I dont know. I dont think a salesman is a good idea for a small business.

People like to deal with the owner. Someone they can call with a problem not some suit in the office.

I could see a benefit with cold calling but quotes and people who call you. I would handle myself.

in this day and age cold calling sucks and if you got a sales rep you got to have him pound the social media and network and focus on generating sales leads for bigger fish.
take advantage of the money your spending and have him generate sales income and fill your schedule as well let him do all leg work and labor in finding and contacting people.
let him go check in and baby sit the crews and being he has a stake in the claim he is not gonna let them milk the job and let it run over because he loses money if it does.
you also have to give them the tools to not be a " salesman " the guy everyone hates.
the company i worked for many years ago and quite a few i know set it up as to where each sales rep is like its own little business.

he has to make it all happen, you supply the equipment and the insurance and the supervision to oversee operations and provide a good foundation of marketing and so forth, but he has to get the sales and schedule and get it all worked out, he is running his jobs and if he can not do that then he is not the guy for you.
if he can not generate a profit and pull his weight he is not up for and qualified for the task.

the biggest downfall to having a sales rep is you can go through a lot of them because it is a tough position and the job is really only salesman by name and really much more and closer to but not quite a operations manager.

the operations manager is the one who oversees all to make sure there is no shenanigans going on like sales reps doing side jobs and earning a second income.

Comment

the job is really only salesman by name and really much more and closer to but not quite a operations manager.

the operations manager is the one who oversees all to make sure there is no shenanigans going on like sales reps doing side jobs and earning a second income.

This is where you had me confused a bit cause it was sounding more like a office manager with commission on sales. I could see what your saying working. You can delegate a lot of the day to day operations this way.

When I think of salesman. I think a guy answering calls and going door to door.

Comment

Great info , we have been tossing this idea around for a few years, dpld, I agree 100 %. we think social media is the up and coming thing, and have been toying with this for the past year,problem is ,its time consuming!
We have not been spending money on yellow page adds because after tracking all calls most leads were from word of mouth or our website. not yellow pages. So here we are with the rest of business, needing new leads trying to figure out if a "cold call" salesman will benifit us? look forward to seeing how this works for the rest of you.
Meanwhile we have signed up for a new contractor directory here in Florida
(only services FL. for now i think) he is pushing the social media thing bigtime
We are doing the final set up with him this week. if we feel it works, i will post a link to thier site for you other florida guys, dont want to waste your time until we think its working for us lol
Have a great day

Comment

I've often thought about sales reps. it's a touchy field though....in past companies I've worked with some great ones, and some not so trusting ones.

I've always looked at sales reps as a "gun for hire" kind of person. They are the go getters, hungry for money. They won't stick around long because they will tap out a market and move on to another company. Turn over rates for sales reps are high, but they are good at what they do....sell sell sell.

But what if there was a way to twist it around? A way like DPLD was talking about or maybe pay a certain commision off new sales (1 to 1), and maybe a bonus based off revenues? Who knows, I'm just rambling.

But I think one day I'll give it a shot. If you can come up with a good plan that will benefit you, I know you'll do well.